Gold is cheap and hated… But it’s not time to buy just yet

Julie Brownlee, Fsp Invest, 14 Aug. 2015

Tags: gold, buying gold, buying gold stocks, buying gold producers, gold miners,

Gold and gold producers are now sitting at attractive prices.

Gold is at a five year low. This is against the uptick of stocks over the same period. And sentiment against the yellow metal is lower than it was in 2001 when it traded at around $260 an ounce.

But it’s not time to buy into gold or gold producers just yet.

Here’s why…

When it will be time to buy gold

Like all assets that have become hated and cheap, it’s prudent to wait to see an uptrend in place before you consider buying, Dr Steve Sjuggerud in Daily Wealth explains.

Gold is definitely not in an uptrend at the moment.

Yes gold is a great way to insure yourself against financial crisis, but as an investment, it’s not a buy.

Gold producers have seen their share prices plunge

Gold producers have suffered whilst the price of gold has been trending downwards. Some gold mining companies are now trading 90% below their peaks. This is squeezing some gold producers out of business.

Yes gold producers are also cheap, but it doesn’t mean you should consider buying them either. Just as with gold, you want to see an uptrend in place before you invest.

Wait for a recovery in gold before investing

Whilst prices are down, there’s nothing to stop them falling further. And this is why it pays to sit on the side lines and wait. Once the price of gold and gold producers start to recover, there will be plenty of upside.

And because they’ve fallen so far, your downside risk will be limited. They’re unlikely to fall much more.

As eager as you may to try snap up a bargain in gold, patience will pay off in the end.

So there you have it. Why it’s not time to buy gold just yet.

*********** Recommended Product ************

How an average guy made an extra R22,000 by watching his favourite sports on TV.

And how you can do the same (even if you’re not that big on sports).

Find out more here


Related QA

Johnny asked:
Hi Timon Thank you for all the advice and guidance on forex trading. I noted that Gold is also listed under metals on my forex platform and can [read more]
Published at 25 Oct. 2016 in: Gold Gold trading 2 answers
Agrippa asked:
What are the benefits of buying Bitcoin? [read more]
Published at 06 Jan. 2016 in: Gold Online marketing 1 Answer
johnwylie asked:
I have some Krugerrands and am concerned that they will lose value as the gold price drops. However, now that our President has sent the Rand into a [read more]
Published at 12 Dec. 2015 in: Gold Protecting wealth 1 Answer
yvonne eribake asked:
I am interested in buying gold coins, but I don’t know whether to buy gold coins like Kruger rands or collectible coins. Have you got any info [read more]
Published at 25 Nov. 2015 in: Gold Gold coins Bullion coins Collectible coins 3 answers
alfredm asked:
How can I buy physical gold? [read more]
Published at 17 Nov. 2015 in: Gold Buying gold Buying physical gold 1 Answer

Related articles: